HMRC Self-Assessment Helpline

Nigel Huddleston Excerpts

Wednesday 20th March 2024 Commons Chamber

[Mr Speaker]

You have good news, Minister.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

Thank you, Mr Speaker.

I thank the hon. Member for Ealing North (James Murray), and others, for raising the important issue of HMRC’s customer services and its plans to provide better services for taxpayers.

As Members probably know, His Majesty’s Revenue and Customs has announced that it is halting planned changes to its helplines, but aims to encourage more taxpayers to self-serve online. It has listened to the feedback and recognises that more needs to be done to ensure that all taxpayer needs are met, while also encouraging those who can to make the transition to online services. Making the best use of online services allows HMRC to help more taxpayers, and to get the most out of every pound of taxpayers’ money by boosting productivity. HMRC helpline and webchat advisers will always be there for taxpayers who need support because they are vulnerable or digitally excluded, or have complex affairs. I recognise that such reassurances were not communicated clearly enough yesterday.

Of course, the pace of this change needs to match the public’s appetite for managing their tax affairs online. The changes in the self-assessment VAT and PAYE helplines announced by HMRC will therefore be halted while it engages with stakeholders, which means that the phone lines will remain open as usual. HMRC will now work with stakeholders—including me—while continuing to encourage customers to self-serve and gain access to the information that they need more quickly and easily by going online or to the HMRC app, which is available 24/7.

[James Murray]

I thank the Minister for his response, but the question that I am tempted to ask is, “Who on earth is running the Treasury?”

This morning, just after we had requested the urgent question, we found out that the Chancellor had told HMRC to “pause” this change. That is a U-turn of quite extraordinary speed and indignity, following HMRC’s announcement yesterday that it would be permanently closing its self-assessment helpline altogether for half the year, from April to September. This morning a Treasury source said

“ministers have halted this change immediately”,

implying that those Ministers had been taken by surprise by the announcement. Can the Minister tell us whether any Treasury Ministers had any involvement in the decision announced yesterday, or whether HMRC’s announcement was made without any ministerial involvement?

In announcing the closure of the helpline, HMRC’s second permanent secretary and deputy chief executive said that the changes would

“allow our helpline advisers to focus support where it is most needed—helping those with complex tax queries and those who are vulnerable and need extra support.”

Can the Minister confirm that HMRC’s plans to help those who are vulnerable and need extra support are now in tatters after the Chancellor’s chaotic U-turn? I note that reports of the Chancellor’s position refer to a “pause” of the change, rather than a scrapping of it altogether. Can the Minister confirm that the self-assessment helpline will now remain fully open this year? If this plan is merely paused, will HMRC still be looking at months-long periods of closure of the helpline in the future?

It is clear that yesterday’s announcement of the helpline’s closure came not as part of a comprehensive, orderly or effective plan to help customers to move online, but rather as a panicked response to the collapse of HMRC’s service levels to an all-time low; and it is clear from today’s chaotic U-turn that this Government are fundamentally unstable, and have given up on serious governing.

[Nigel Huddleston]

I am sure the hon. Member is aware that HMRC is a non-ministerial Department. Ministers set strategy and work closely with the Department on operations and communications. It is important to recognise that 67,000 people work for HMRC. They go to work every day and try to do the right thing, and it is important to recognise that many people there work very hard.

The overall strategy is absolutely right and I completely support it, and I will give the hon. Member an example of why we need to encourage and support the move to online services. In 2022-23, HMRC received more than 3 million calls on just three things that can easily be done digitally: resetting online passwords, getting one’s tax code and getting one’s national insurance number. That involves almost 500 people working full time to answer just those calls, and such resources could be redeployed. The hon. Member can be reassured that those who are not digitally savvy and those with difficulties will always be able to access services, including telephone services.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Harriett Baldwin (West Worcestershire) (Con)]

May I thank the Financial Secretary and the Chancellor for listening to the howl of pain that came from ordinary taxpayers when they saw the announcement yesterday? Those who contact the HMRC hotline are the most law-abiding, tax paying people across this land.

This morning, the Treasury Committee has published more data showing that it is increasingly difficult to contact HMRC by telephone. While I fully endorse what the Minister has just said about the long-term strategy to move people online, it cannot be done by randomly shutting down HMRC’s telephone lines.

The Minister had an excellent digital track record in the private sector before he came into Parliament. May I urge him to use that experience to make this much more of a gradual transition for those law-abiding citizens of ours?

[Nigel Huddleston]

I thank my hon. Friend and the Select Committee for their work in this area. I know that HMRC customer service has been an area of focus for her and others for some time, and we appreciate the input. I recognise that she acknowledges the potential opportunities and the upside to encouraging more people to go online, but the point she makes is really important. HMRC has taken the feedback with good grace, because it is important that we move at the speed at which the public are willing to move. Of course, some people are not willing or able to move to purely online services.

I am sorry for not responding earlier to the hon. Member for Ealing North (James Murray) on whether the telephone lines will stay open. Yes, of course they will.

[Mr Speaker]

I call the SNP spokesperson.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

This is absolute chaos. The proposal to permanently close the self-assessment helpline for half the year was truly half-baked and irresponsible, as were the planned restrictions to the VAT helpline. The reversal is welcome, but the fact that the announcement was made at all highlights the disconnect at the heart of HMRC’s customer operations. As the Federation of Small Businesses has pointed out,

“customer service levels are at an all-time low”—

a view backed up by the Public Accounts Committee. At a time when the Chancellor’s policies are fiscally dragging more people into PAYE, the proposal was typically tone deaf to people’s needs.

Fran Heathcote of the PCS union has said that

“the combination of low-pay and micro-management”

is “rife across the whole” of HMRC’s customer service department. The Minister said that HMRC is a non-ministerial Department, but we know that it has been told what to do by the Chancellor overnight. When did the Government get notice of the announcement? Was it a reaction to the Chancellor’s decision to cut HMRC’s budget by £1.6 billion next year? Will he now ensure that the cut is reversed and order HMRC to recruit more customer service staff, and will he now instruct HMRC to make the reversal permanent?

[Nigel Huddleston]

As I outlined a few moments ago, I think we can all appreciate that in order to serve customers, and particularly those who most need support, we need to ensure that those who do not need to go online have alternative channels—by the way, the customer service levels are higher in online channels—and the use of the app, which I encourage all individuals to use. Those who can go online will find a very effective and efficient service, so this is absolutely the right strategy and one that I completely and utterly support. We have also previously had a trial closure of the lines, and the report released yesterday showed that it worked quite well.

The hon. Gentleman also asked about redeployment. HMRC is proactive in notifying people who, for example, do not need to provide a self-assessment form. I think more than 1 million people were notified last year that they did not need to do so. Following other changes in Government policy, we have also communicated that those on high incomes—up to £150,000, for example—but do not have complex tax affairs do not need to provide a self-assessment return. There is a broad package going on here to enhance and improve customer service, but we recognise that many people like and would prefer a telephone service.

[Miss Sarah Dines (Derbyshire Dales) (Con)]

Despite extensive Government investment in rural broadband in my constituency, there remains a lack of connectivity, with small businesses, the elderly and the vulnerable still having difficulty going fully online. What can the Minister do to ensure that nobody will be left behind in Derbyshire Dales?

[Nigel Huddleston]

My hon. Friend makes the really important point that there are still people in this country, including in her constituency, who are not digitally aware or who are digitally excluded for a variety of reasons. That is why an important part of our strategy is to ensure that those who are digitally excluded, and those who are vulnerable or have particularly complex affairs, can always reach a human being.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

This is another chaotic Government U-turn, with the Chancellor taking the decision this morning to scrap plans to close HMRC phone lines less than 24 hours after the measures were announced. A Treasury source admitted this morning that closing HMRC’s helplines would be to

“the detriment of the general public and the vulnerable who need access to the helplines to support them with tax matters. ”

This is part of a wider malaise within Tory broken Britain where many of my Slough constituents cannot speak to a doctor when they want to, cannot register for an NHS dentist and much worse besides. So why was this decision taken in the first place?

[Nigel Huddleston]

I mentioned in my opening comments—I will stress it again because it is important that nobody scaremongers about this—that it was never intended, and never would have been the case, that the vulnerable, the digitally excluded or those with complex affairs would be unable to access these services, even with the proposals set out yesterday. On that particular point, the hon. Gentleman is just wrong.

[James Sunderland (Bracknell) (Con)]

I am grateful to the Minister for his statement, which I welcome. Last September, in this very place, I raised the issue of heavy fines being imposed on self-employed constituents for late submission of self-assessment forms, even though no moneys were owed. I met the Minister in post at the time, but will the current Minister please write to me with an update on progress?

[Nigel Huddleston]

I thank my hon. Friend for raising this matter. I reiterate that there is a very good reason why HMRC’s structure and relationship with Government is as it is, because it would be inappropriate for Ministers to interfere with individual tax affairs. However, I would be more than happy to raise his point with HMRC and respectfully ask that it pays it due attention. Of course, the Government set broader policy.

[Helen Morgan (North Shropshire) (LD)]

As a former financial controller of a small business in a rural place, I have used those helplines extensively, not least in sorting out disputes when HMRC has got its data wrong. Given that our own experience is that the website’s process is byzantine, that the waits on the phone lines are inordinately long, and that £36 billion of tax goes uncollected by HMRC every year, how can anyone have any confidence that the Treasury is working effectively?

[Nigel Huddleston]

Very simply, we have one of the lowest tax gaps reported in the world, at about 4.8%, precisely because of the clarity of the tax system and the efficiency of HMRC in gaining the tax that is owed. Of course there are customer service challenges, and I am having conversations with HMRC about that. HMRC is also held to account in the Chamber, the Treasury Select Committee and elsewhere, as appropriate. It is important that we recognise that HMRC received 38 million telephone calls and 16 million pieces of correspondence in 2022-23. If it were a private sector business, we can see how it would make sense strategically to move, where appropriate, as much of that activity as possible online, where it can be dealt with more appropriately and often more quickly.

[Caroline Nokes (Romsey and Southampton North) (Con)]

The Women and Equalities Committee, which is currently carrying out an inquiry on the rights of older people, this week met Independent Age and a range of stakeholders in Andover. They made the point that older people need to be able to access all services on the telephone, as people who are disabled or have a visual impairment find online services difficult. To be able to communicate effectively, people who are hard of hearing need websites with a British Sign Language overlay. Independent Age and the stakeholders I met were horrified at yesterday’s announcement on the closure of the helpline.

What consultation has there been with my hon. Friend the Member for Mid Sussex (Mims Davies), in her expanded role as Minister for Disabled People, on the potential impact of these changes? When Members of Parliament deal with HMRC on constituency casework, it now tries to push us into using the telephone rather than email. Can the Financial Secretary assure me that vulnerable people will still be able to use telephone services? Will he comment on the contradiction between how Members of Parliament and the public are dealt with by HMRC?

[Nigel Huddleston]

I assure my right hon. Friend that we are having live conversations with HMRC about how it communicates with Members of Parliament on behalf of our constituents. Some Members tell me that they would prefer a telephone call, whereas others would prefer email. It is important that we have both. I am more than happy to communicate views and opinions from across the Chamber on that point. I am well aware that one of the biggest areas of concern about yesterday’s announcement, and one of the reasons why the feedback has been so loud, is that vulnerable people, including those with disabilities, might not be helped. It was never the intention or the plan that such people would be unable to access online, webchat or other channels.

[Tonia Antoniazzi (Gower) (Lab)]

The Minister has spoken about members of the public who are willing and able to access services online. Members have to complete our own self-assessment form. I am willing and able, but I still need access to a telephone helpline. He said that 500 people are needed to answer the same three questions, which obviously cannot be handled by the online system. Following this announcement, is he confident that HMRC has the digital tools necessary to cater for more than 12 million self-assessment taxpayers?

[Nigel Huddleston]

I need to correct the hon. Lady, as the vast majority of the points I raised could be handled online, including through the app. One of the things we must do is communicate far more clearly. A fair point has been raised in the Chamber today, and I will continue to discuss it with HMRC, because there are clearly some challenges with communicating what is available, where help exists and so on, but there is a wealth of information on the digital offerings, particularly the app, and I encourage people to adopt them, where possible. The hon. Lady makes a valid point that people who cannot adopt them will need other help, and we are listening.

[Sir Julian Lewis (New Forest East) (Con)]

It is clear that HMRC made a serious mistake, and the Government acted commendably quickly in intervening to put matters right. I am sure they will now take a close interest in what happens next. As a matter of policy, will the Minister ensure that, whatever the future holds, it will not be anything so sudden or brutal, and that there will be a trial period before anything so dramatic is implemented across the board?

[Nigel Huddleston]

As I mentioned a few moments ago, there has been a trial closure of telephone services. The recently reported results show that the trial worked quite well. As we heard overnight and are hearing again in the Chamber today, the important challenge is that the confidence behind that has not been effectively communicated. The reassurances that I personally received on what will happen to help those who are not able to access online services—including the disabled, those without digital access and those with particularly complex cases—were not communicated. That is important to making sure that, as HMRC moves forward and policy is developed, we move at a pace with which people are comfortable.

[Sammy Wilson (East Antrim) (DUP)]

I hope that HMRC’s screeching U-turn is a result of the Minister’s action. If it is, I congratulate him on stepping in so quickly. Does he agree that, at a time when more and more people are being dragged into complex tax returns because of fiscal drag, when 1 million people had their calls to HMRC unanswered in January and when a record number of people are putting in their tax returns late because they cannot get information, HMRC should not have adopted such a policy? Will the Minister give us an assurance that this is not temporary and that whatever help income tax payers require to pay their tax will be made available?

[Nigel Huddleston]

I give the right hon. Gentleman an assurance on the latter point. As I have outlined several times today, I think we can all recognise that the move to digital, where appropriate, will relieve the burden on the people answering telephone calls and on some other services, allowing them to deliver precisely the end goal that he describes. Simplifying the tax system is a goal of Government policy. I gave an example of people on high incomes with relatively simple tax affairs—those who pay through PAYE, for example—and we are trying to remove as many of those people as possible from self-assessment. I completely understand the right hon. Gentleman’s points.

[James Wild (North West Norfolk) (Con)]

Although decisions on individual tax cases are rightly managed independently by HMRC, political and public pressure saw this ridiculous decision squashed. What steps will Ministers take to improve the accountability and performance of HMRC?

[Nigel Huddleston]

There are a variety of channels and tools, including my ministerial oversight. The Treasury Select Committee and other bodies also play an important part. I am not suggesting in any way, shape or form that I am removing myself from responsibility for HMRC, as I have ministerial oversight. If colleagues have concerns, they can always raise them with me. It is my job to raise those concerns with HMRC.

[Chris Stephens (Glasgow South West) (SNP)]

I refer to my entry in the Register of Members’ Financial Interests, as I chair the Public and Commercial Services Union parliamentary group.

Does the Minister accept that one of the more disgraceful aspects of this episode is that neither the trade unions nor the staff appear to have been consulted prior to yesterday’s announcement? Does he accept that this is no way to conduct industrial relations or to deal with staff? How does he see yesterday’s announcement in the light of the Public Accounts Committee’s comments that the Department has to improve its ability to reach out to taxpayers and that it needs additional resources? Why are the Government now restricting customer access to the Department?

[Nigel Huddleston]

HMRC and I have heard and respect the views of the PAC and other bodies, including their recommendations and suggestions for improvement. Of course, many of these bodies suggest that the continuing move towards digital and online is an important part of that process. As I have said, I do not have day-to-day operational responsibility for HMRC, but I do have oversight. I proactively requested a meeting with the unions several weeks ago, and that is what I have tended to do in all my ministerial roles.

[Sir Christopher Chope (Christchurch) (Con)]

This is a welcome U-turn, but does my hon. Friend accept that one of the problems is HMRC’s chronic lack of productivity? Is that not made worse because so many people are working from home?

[Nigel Huddleston]

My hon. Friend is correct that a focus on productivity is key, and I can assure him that these are exactly the kinds of conversations that I am having. The Chief Secretary to the Treasury is leading a cross-Government review of productivity. HMRC staff are required to work in the office for 40% of the time. I have asked HMRC to assess and monitor the productivity of staff who are working from home versus staff working in the office, and there is very little difference. Because of the concern expressed by my hon. Friend and others, I will keep an eye on it.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

The reprieve is welcome, but if we are to keep these helplines open, can we at least resource them properly and make them work? I spoke to a chartered accountant in my constituency this morning, and he tells me that when he recently phoned HMRC with a complex query on behalf of a client, it took 40 minutes to get an answer. When the phone was answered, there was an acknowledgment of the problem. He suggested that the answer might lie in his client’s wife’s data being incorrectly ordered, at which point he was told that the staff were allowed to handle only one case per call, and that he would have to hang up and phone back, with another 40-minute wait for an answer. Surely that is no way to treat a customer.

[Nigel Huddleston]

I thank the right hon. Gentleman for raising that point, and I am happy to raise it with HMRC.

[Alison Thewliss (Glasgow Central) (SNP)]

I am regularly contacted by constituents who have had poor services from HMRC, as I am sure many of my colleagues are. These people are pretty certain that they would still be waiting had they not got their MP involved. My constituent Mr McCall retired to care for his terminally ill wife in 2021, but has since been chased repeatedly by HMRC to provide a tax return for 2022-23. He does not use email and has described the diabolical experience he has had with the phone line; he waited 50 minutes for an automated voice, and the line then went dead. Does the Minister accept that that service level is not acceptable at all, and things must improve? Would he like to take the opportunity to apologise to Mr McCall for the distress that HMRC has caused him?

[Nigel Huddleston]

Yes, I am sorry to hear about those circumstances for the hon. Lady’s constituent. As I said, I have to be careful given the need to keep at arm’s length in individual cases, but she also raises a broader policy point. A lot of training and work goes on. I repeat that some 60,000 people work for HMRC, many of whom are dedicated, hard-working and well-trained individuals, and they often do a thankless job, but she makes a valid point, and I will happy raise that issue. I spoke incorrectly a few moments ago, so may I take the opportunity to correct what I said, Mr Speaker? HMRC staff are required to work in the office 60% of the time, not 40% of the time.

[Wendy Chamberlain (North East Fife) (LD)]

The Government were forced to extend the state pensions top-ups through to April next year because of unacceptable delays on the Department for Work and Pensions/HMRC helpline for that issue. The Minister has mentioned that a review will take place; will that helpline be in its scope? It is a concern to many, many constituents.

[Nigel Huddleston]

As I say, I have ongoing engagement with HMRC. It is operationally independent, but I do have some oversight, and ministerial guidance is appropriate. I appreciate all the comments made by hon. Members today. These will be live conversations, and HMRC is listening to the conversations today. I will be happy to raise with it the points that she makes.

[Jim Shannon (Strangford) (DUP)]

First, let me thank the Minister for a positive response, and for trying to solve the problems; we appreciate that. Constituents have told my office about their struggle to get through to HMRC on the phone lines. There is no doubt that people still rely on services that allow them to speak to an individual. That is so important, as it is for us as MPs. We had 1 million calls unanswered in January alone, which illustrates clearly the problem that the Minister is trying to address. Does he not see that there must be an enhanced service for all of the United Kingdom of Great Britain and Northern Ireland, to ensure that all calls are answered and dealt with? The better option of a personal phone call is right, and we need a drastic change to be made.

[Nigel Huddleston]

It is important that HMRC commands respect—to a broad degree, it does—across the House and among our constituents, because that is how we can ensure that we comply with tax requirements. Where there is confusion, uncertainty or a valid question, it is important that people can get help, advice and support. For some people, it is appropriate to go online to get that, but that is not the case for everybody. As I said, the comments made today are very much appreciated. I suspect that the hon. Gentleman will recognise that, as I have said many times, it is important that all of us encourage and support the digitisation of these services, and the adoption of the app by our constituents, because that will help ensure that the time available is focused on those who most need help and support.

Royal Assent

[Mr Speaker]

I have to notify the House, in accordance with the Royal Assent Act 1967, that His Majesty has signified his Royal Assent to the following Acts:

Supply and Appropriation (Anticipation and Adjustments) Act 2024

National Insurance Contributions (Reduction in Rates) Act 2024

Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Act 2024

Bishop’s Stortford Cemetery Act 2024.

Oral Answers to Questions

Nigel Huddleston Excerpts

Tuesday 19th March 2024 Commons Chamber

[Rachel Hopkins (Luton South) (Lab)]

12. What recent assessment he has made of the potential impact of his tax policies on living standards.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

Thanks to the combined impact of national insurance cuts and above-inflation increases to thresholds since 2010, an average worker on £35,400 in 2024-25 will pay over £1,500 less in personal taxes than they otherwise would have done. These national insurance contribution cuts were possible due to the significant progress we have made in combating inflation.

[Paul Blomfield]

I heard what the Minister has to say but does he not recognise the OBR’s assessment of the interplay between the Government’s threshold changes and NICs? The OBR concludes that for every 5p gain per year there is a 10p loss, particularly for those on lower wages. Does he accept the OBR assessment?

[Nigel Huddleston]

I am sure that if the hon. Gentleman looks carefully, he will see that the Government have demonstrated their commitment to supporting the most vulnerable in society. He will also have heard my hon. Friend the Member for North East Bedfordshire (Richard Fuller) explain the circumstances as to why we have higher taxes than we would desire. If the hon. Gentleman is telling me that Labour party policy is to change the thresholds, perhaps he can have that conversation with the shadow Chancellor, who can explain how she would pay for that.

[Dan Carden]

The OBR has said that this will be the worst Parliament on record for living standards and the only one in which they have fallen: people are poorer after 14 years of this Government. We do not need fiscal tweaks; this economy needs renewal. It needs to bring in investment on a major scale, and a new age of education, training and employment in the real economy. My constituents cannot afford to wait while the Tory party looks for its polling fortunes to change. Have we not now reached the point where the best thing for the economy is a general election?

[Nigel Huddleston]

I completely disagree with the hon. Gentleman’s explanation. Not only will I repeat that our constituents completely understand the difficult global circumstances, with the pandemic and the cost of living challenges following the invasion of Ukraine, but I can say that we have grown faster since 2010 than many other major economies, and the IMF forecasts that we will grow faster than Germany, France, Italy and Japan. In the year to the third quarter of 2023, real household disposable income per person was around £1,100 higher than the Office for Budget Responsibility expected in its spring Budget 2023 forecast. We have turned a corner, and the best thing to do is to stick with the Conservatives.

[Rachel Hopkins]

The Minister says that the economy has turned a corner, but households will be £870 worse off on average under the Conservatives tax plan, and they will also be seeing their costs up by £110 a week compared with before the last election. Is the Minister proud of his record?

[Nigel Huddleston]

We are immensely proud of our record since 2010: living standards have increased, and growth is now better than that of many other major economies. Our absolute commitment to protecting the most vulnerable in society was shown recently when we provided an average of £3,400 in cost of living support for each household. We have turned a corner, and the economy is improving. I am just disappointed that the Opposition constantly talk down the UK economy and their constituents.

[Steve Double (St Austell and Newquay) (Con)]

Will my hon. Friend confirm that, following the 4p cut in national insurance that the Chancellor has introduced, the tax take on workers will be the lowest it has been for 50 years? In St Austell and Newquay, two people in a household on average incomes will be paying £1,800 less this coming year than they did last year.

[Nigel Huddleston]

Yes, absolutely, my hon. Friend has pointed out an important point on how we have had a laser focus on reducing the personal tax rates. Furthermore, the measures announced in the autumn statement and in the spring Budget will significantly add to economic activity, contributing about 200,000 full-time equivalent jobs to the economy, and I am sure that the whole House will welcome that.

[Dr Luke Evans (Bosworth) (Con)]

Pensioners can often struggle because they have a fixed income, so I was pleased that the Chancellor stuck with the triple lock last year, guaranteeing an increase of 10.1%. Will the Minister explain how the 8.5% rise that people will be getting in a couple of weeks’ time will make a difference to their living standards?

[Nigel Huddleston]

My hon. Friend makes an important point. It is the case that not only have the measures in the autumn statement and the spring Budget helped workers, but we have also focused on helping pensioners. Those on the new state pension will benefit to the tune of about £900 a year, which is significant, and the national insurance cuts will benefit the average worker —27 million employees—by £900 a year. Therefore, we have implemented a fair and balanced Budget and fair and balanced measures.

[Jonathan Gullis (Stoke-on-Trent North) (Con)]

Families in Stoke-on-Trent North, Kidsgrove and Talke have been supported by this national insurance cut, which means that the average family will be £1,800 a year better off. The freezing of the fuel duty means that motorists will be able to get around without being unfairly charged at the pump. Money from this Government has enabled Stoke-on-Trent to cut bus fares by a third, so that people can travel around. We have had £56 million from the levelling-up fund and £17.6 million for the Kidsgrove town deal, which means that the sports centre will be refurbished and reopened, improving people’s health chances. The Labour party closed it because it could not be bothered to pay a single pound to save it back in 2017. Is it not the reality that we have a clear plan that will help the families of our great constituencies, particularly in Stoke-on-Trent North, Kidsgrove and Talke, while Labour will borrow more, tax us higher and lead us back into recession, just as it did in 2008-09?

[Nigel Huddleston]

I could not agree more with my hon. Friend. This is fantastic, and I think it is a recurring pattern, Mr Speaker. We have positivity, optimism, and confidence in the future of the UK economy from Conservative Members, but absolute negativity from Opposition Members, because they have no plan, they have no clue and they have no hope. We have a plan and it is working.

[Mr Speaker]

I call the shadow Minister.

[Darren Jones (Bristol North West) (Lab)]

Why does the Treasury Minister think people feel worse off after 14 years of Conservative Government?

[Nigel Huddleston]

As I said, we are turning a corner and have therefore made measures to put money back into people’s pockets. I do not think it would come as a surprise to the hon. Gentleman’s constituents, or to those of any Labour Member looking at the Labour Opposition’s recent record, that Labour claimed on the one hand that it was supportive of tax cuts, but last week failed to support those tax cuts when it came to it in Parliament.

[Darren Jones]

The Minister did not answer the question about why the public feel worse off. We on the Labour side of the House know why. He mentions tax cuts, but he does not talk about the freezing of tax thresholds, or indeed about the council tax that is about to be levied on people, not just this year but each year for the next five years. Why cannot he admit that, for every 10p extra in the pound taken from people since 2010, the Government are only now giving back just 5p?

[Nigel Huddleston]

If I am hearing correctly, the Labour Front Benchers are announcing fundamental changes to policy that they have not yet costed. They did not object, as far as I am aware, to any of the measures required to support households and businesses during the pandemic, which necessitated increases in taxation. We are now reducing the level of taxation because we have turned a corner. They did not support that. It is interesting that they say one thing but then do not take action. I think they need to explain to their constituents why they failed to support the tax cuts last week.

[Martyn Day (Linlithgow and East Falkirk) (SNP)]

4. What assessment he has made of the potential impact of the Spring Budget 2024 on levels of block grant funding for Scotland.

--- Later in debate ---

[Karl MᶜCartney (Lincoln) (Con)]

7. What assessment he has made of the impact of raising the high-income child benefit charge threshold on household incomes.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

The Government will raise the point at which child benefit is fully withdrawn to £80,000 from £60,000, and we will raise the high-income child benefit charge threshold to £60,000 from £50,000 from 6 April 2024, taking 170,000 families out of paying the charge. Overall, these changes mean that almost half a million hard-working families will gain an average of £1,260 towards the cost of raising their children.

[Karl MᶜCartney]

These changes are welcome, and they mean that more Lincoln families will receive more support from the Government, as I told the Minister in Lincoln on Friday. Will my hon. Friend confirm when the formal consultation on basing child benefit on household income rather than on individual income will commence, if the civil servants in the Treasury will let him do it?

[Nigel Huddleston]

I thank my hon. Friend. It was a pleasure, as always, to meet him in his constituency on Friday, where we discussed this matter and many others. The Government will launch a consultation in due course on how to end this unfairness by administering the HICBC on a household rather than an individual basis. Doing so would require significant reform of the tax system, as our tax infrastructure does not currently have a mechanism to consider household income, but the Government plan to end the unfairness for single-earner families in the child benefit system by administering the HICBC on a household rather than an individual basis by April 2026.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for that. Child benefit income is an integral part of how families make their money last through the whole week. If there are any changes that will reduce it in any way, is it the Minister’s intention to ensure that those who have questions, difficulties or concerns have their concerns and wishes taken on board? It is really important that those facing financial changes can cope with the changes to come.

[Nigel Huddleston]

I thank the hon. Gentleman. It is precisely because of the complexities involved that we will have the consultation. I am sure that his views and those of his constituents will be warmly welcomed in that.

[Simon Baynes (Clwyd South) (Con)]

8. What fiscal steps his Department is taking to help increase the level of business investment.

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[Helen Morgan (North Shropshire) (LD)]

14. What recent assessment he has made of the impact of his income tax policies on pensioners.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

The Government have nearly doubled the personal allowance since 2010, and in 2024-25 it will be more than 20% higher in real terms than if it had been uprated by inflation since 2010-11. The personal allowance is currently set at a high enough level to ensure that pensioners whose sole income is the full rate of the new state pension, or the basic-rate pension, do not pay any income tax.

[Helen Morgan]

I have been contacted by pensioners in my constituency who get a full state pension plus protected payments from the old scheme. The increase in their pensions in line with inflation has put them over the personal allowance threshold for paying income tax, which has eaten away at that increase. Was it the Minister’s intention in the Budget to drag pensioners into paying income tax?

[Nigel Huddleston]

As I have outlined, and as the Resolution Foundation and others have pointed out, pensioners have gained about £1,000 on average as a result of the Government’s decisions since 2010 to increase thresholds. Some pensioners rely solely on the state for their incomes, and we are supporting pensioners through a variety of other measures: not only the triple lock but pension credit and cost of living support. Pensioners across the country will benefit from the 8.5% increase coming in April.

[Dame Andrea Jenkyns (Morley and Outwood) (Con)]

I welcome the recent tax cuts. We need to ensure that those who work hard and do the right thing are rewarded in their old age. Can the Treasury please stop allocating funds to France, which is clearly not stopping the boats, stop extortionate amounts being spent on hotels for illegal migrants, and reduce the foreign aid budget? Maybe then we can give even more to our pensioners.

[Nigel Huddleston]

My hon. Friend will be well aware that Government Members are implementing measures to tackle the very problems she outlines while turning the corner in the economy and doing everything we can to put more money back in people’s pockets, whether workers or pensioners.

[Nickie Aiken (Cities of London and Westminster) (Con)]

20. What assessment he has made of the potential merits of reintroducing tax-free shopping for international visitors.

[The Financial Secretary to the Treasury (Nigel Huddleston)]

As set out at the spring Budget, we are considering the findings of the Office for Budget Responsibility’s review of the original costing of the withdrawal of tax-free shopping, alongside industry representations and broader data. The Government welcome further submissions from stakeholders in response to the OBR’s findings as we keep all taxes under review.

[Nickie Aiken]

Last week, the OBR informed the Treasury Committee that it has not assessed the Treasury’s forecast that it would cost £900 million to extend tax-free shopping to EU visitors. The OBR has also failed to support the Treasury’s assumption that EU visitor behaviour and costs can be extrapolated from assessed non-EU data. The UK retail industry firmly believes that it will cost as little as £50 million to reintroduce tax-free shopping for tourists. As we mark English Tourism Week, is it not time that we had a full, independent review of the Treasury’s data on tax-free shopping?

[Nigel Huddleston]

I thank my hon. Friend for her consistent championing of tourism, particularly during English Tourism Week. It is not in the OBR’s remit to consider the effect of alternative policies and, as expanding tax-free shopping to EU visitors is not current Government policy, it has not considered that. However, the findings of the review will be useful in giving insights on the overall behavioural incentives of the policy, which will be relevant for both EU and non-EU populations. It is therefore right that the Government take time to consider the OBR’s findings along with other representations and within the context of broader data, as announced in the Budget.

[Andrew Bridgen (North West Leicestershire) (Ind)]

T1. If he will make a statement on his departmental responsibilities.

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[Mr Ranil Jayawardena (North East Hampshire) (Con)]

I am delighted that my right hon. Friend the Chancellor is seeking to make the tax system more family friendly, including by collecting household data in the years ahead, but being family friendly includes looking after the family home. Sweden abolished inheritance tax in 2004. The result was a boom in entrepreneurship, economic growth and higher tax revenues. Will he, or one of the excellent ministerial team, meet me to discuss that further?

[The Financial Secretary to the Treasury (Nigel Huddleston)]

I thank my right hon. Friend for his advocacy in support of families. We have had conversations, and I know that he very much welcomes the changes to the high-income child benefit charge and child benefit. We always keep taxes under review, and I am always delighted to meet him.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

Does the Chancellor accept that he has caused a great deal of anxiety and further distrust among those who have been infected and affected by the contaminated blood scandal by not making any provision in his Budget for compensation, although the recommendations for compensation were made to the Government last April?

National Insurance Contributions (Reduction in Rates) (No.2) Bill

Nigel Huddleston Excerpts

2nd reading
Wednesday 13th March 2024 Commons Chamber

[The Financial Secretary to the Treasury (Nigel Huddleston)]

I thank all right hon. and hon. Members for their contributions. I think it would be fair to say that a range of perspectives have been presented, but most of us—certainly on the Government Benches—agree that this is an important piece of legislation. It will deliver tax cuts that make the tax system fairer, while rewarding and incentivising work, and growing the economy in a sustainable way. The national insurance cuts are an important part of that, and they are policy.

I want to respond to the confusion of the hon. Member for Hampstead and Kilburn (Tulip Siddiq), which is understandable given that we have heard promises, policies, aspirations and ambitions from the Labour party in relation to the £28 billion. Let me be clear: it is my party’s ambition to eliminate national insurance. I know that Labour Members do not understand what the word “ambition” means and that it is difficult, but it is an ambition. That is the difference.

I will briefly reiterate the Bill’s main measures and what they seek to achieve. First, the Bill builds on the cuts to national insurance announced in the autumn statement by reducing the main rate of class 1 employee NICs from 10% to 8%. That change will come into effect from 6 April 2024, with employees benefiting from April onwards as employers make the changes to their payroll systems. Secondly, the Bill reduces the self-employed class 4 main rate of NICs from 8% to 6% from 6 April. That follows on from the one percentage point reduction to the main rate of class 4 NICs from 9% to 8% announced in the autumn statement 2023.

Now that inflation is falling and the economy is improving, as we saw in this morning’s figures, which I am sure the Opposition welcome, we can responsibly return some money to taxpayers, but it is important to do so in a way that supports work and grows a sustainable economy for the future. A UK employee can already earn more money before paying income tax and social security contributions than an employee in any other G7 country, and thanks to the NICs cuts in the autumn statement and the spring Budget and above-inflation increases to thresholds since 2010, an average worker on £35,400 in 2024-25 will pay over £1,500 less in personal taxes than they would have done if the thresholds had just increased in line with inflation. As my hon. Friend the Member for St Austell and Newquay (Steve Double) pointed out very well, in contrast to the comments of the hon. Member for Hampstead and Kilburn, we have reduced the amount of tax paid by increasing the threshold from £6,500 to more than £12,500 over the period in which we have been in office. Labour opposed many of those threshold increases.

My hon. Friend the Member for St Austell and Newquay also made the important point that the measures we have taken in recent fiscal events have been focused on helping 29 million workers. Some 27 million employees will benefit from an average £900 saving in national insurance, but of course, we also care deeply about pensioners. Those on the full basic pension will receive an extra £700 in April and those on the full new state pension will receive an extra £900, so 12 million pensioners will also benefit from the significant increases that we will provide through the triple lock. Of course, it is perfectly fair that workers also get some advantage—they will be receiving the benefits I have outlined. The Government are cutting taxes in a responsible way, and have taken difficult but responsible decisions to restore the public finances in the wake of global crises.

[Drew Hendry]

The Minister has used the word “responsible” a number of times. As has been pointed out by many organisations, not least the Institute for Fiscal Studies and the OBR, there will be substantial cuts to public services. With many English councils already in special measures—effective bankruptcy—where does the Minister see those cuts falling? How will they filter through to the public, and what will be the effect on public sector jobs?

[Nigel Huddleston]

As the hon. Member will be aware and as the Chancellor outlined, based on current spending assumptions, total departmental spending will still be £86 billion higher in real terms by 2028-29 than at the start of this Parliament. If he was listening to the debates earlier this week, he will be aware that we will increase spending in real terms by 1% during the forecast period.

The hon. Member and others have raised points about fairness and making sure that we look after the most vulnerable in society, which is of course something we are committed to. Distributional analysis published alongside the spring Budget shows that the typical household at any income decile will see a net benefit in 2024-25 as a result of Government decisions made in the autumn statement—and, indeed, from the autumn statement 2022 onwards—and that low-income households will see the largest benefit as a percentage of income.

We have mentioned many times our commitment to the national living wage. It will soon increase by 9.8% to £11.44, which is expected to benefit around 2.7 million workers. It is important to stress that from April, a full-time national living wage worker’s take-home pay will be 35% greater in real terms than it was in 2010, due to successive increases in the national living wage and changes to personal tax rates and thresholds.

To respond to a few other comments made by right hon. and hon. Members, my right hon. Friends the Members for Witham (Priti Patel) and for Wokingham (John Redwood) both gave excellent speeches, in which they not only championed workers—including the self-employed—but highlighted the fact that we have to operate in a particular context. As has been mentioned many times today, we are in a difficult financial situation because of a global pandemic that hit the global economy, which was followed by the invasion of Ukraine and the significant impact it had on inflation around the world.

The question, as my right hon. Friend the Member for Wokingham pointed out, is how much higher taxes would be if Labour had been in charge. Throughout the pandemic, the Government received a lot of support from Members on both sides of the Chamber. That was completely right, but many Members were calling for even greater intervention and even longer lockdowns, which would potentially have done immense damage to the economy.

Some hon. Members raised the contributory principle. In our ambition for further reductions in national insurance, we will make sure that the future tax system has the right mechanism for establishing entitlement to contributory benefits, including the state pension. My right hon. Friend also mentioned the rise in the VAT threshold, which is really important. It will go from £85,000 to £90,000, which means that 28,000 fewer small businesses will be registered for VAT. My hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) highlighted this Government’s record on jobs in creating 800 jobs a day and in significantly reducing youth unemployment, of which we can all be proud.

My hon. Friend the Member for Aberconwy (Robin Millar), who raised many important points in his speech, pointed out the rather irresponsible scaremongering we have heard today from those on the Labour Front Bench relating to spending on pensions and the NHS. The Opposition should be well aware, especially if they wish to form a Government, that the money raised by NICs does not determine the amount going to the NHS and state pensions. We have announced increasing funding to the NHS and we are uprating state pensions by 8.5% this year, as I have mentioned. We on these Benches can tolerate a decent debate—we are fairly robust— but we will not tolerate irresponsible scaremongering, especially when targeted at the most vulnerable in society, purely to try to take political advantage from making up policies that do not exist. I hope that at some point the Opposition will either get some economic competence or apologise for that.

This really important Bill delivers tax cuts for over 29 million working people. A yearly saving of over £450 for the average worker will result from this Bill alone. Taken together with the cuts to NICs at the autumn statement, it will be worth over £900 per year for the average worker. This will benefit households throughout the United Kingdom and in every single constituency represented in this place. However, here we are again, and in nearly three hours of debate, we have heard nothing but doom and gloom from the Opposition. How disappointed they must have been this morning to hear that the economy has grown. While I am not pretending for one minute that everything is perfect—as I have said, our constituents and the country have been through a very challenging time—it is important to recognise, welcome and applaud success, especially if a party wants to lead a country, champion trade abroad and attract investment. What a terrible advert for the UK we have heard from the Opposition today, who are completely lacking in confidence and ambition for our economy and our workers.

The national insurance cuts we are debating reward work and will provide a further boost to the economy. We are turning a corner, and the plan is working. While we want to put more money back into people’s pockets, the Opposition want to take more out, and while we take every opportunity to talk the country up, they take every opportunity to talk Britain down. The choice is very clear: a plan for growth and a brighter future with the Conservatives, or no hope, no clue and no plan with the Opposition. I commend the Bill to the House.

[Mr Deputy Speaker (Mr Nigel Evans)]

Should there be a vote on the amendment, 10 minutes will be allowed, and if there is then a vote on Second Reading, eight minutes will be allowed.

Question put, That the amendment be made.

National Insurance Contributions (Reduction in Rates) (No. 2) Bill

Nigel Huddleston Excerpts

Committee of the whole House
Wednesday 13th March 2024 Commons Chamber

[Nigel Huddleston]

I outlined the purpose of the Bill in my earlier speech. It is a short and clear Bill with a very clear purpose. It is our desire to move quickly in order for the changes to take effect from 6 April 2024. I sense Members’ desire to move quickly in cutting people’s taxes, and I will detain the Committee no longer.

[James Murray]

I fear that my speech may be marginally longer than the Minister’s, but I can assure you, Mr Chair, that it will not be too lengthy, because, as I made clear on Second Reading, we will support the national insurance reductions that the clauses in the Bill seek to deliver.

Clause 1 seeks to reduce national insurance contributions by reducing the main rates of employee class 1 and self-employed class 4 contributions, as well as the reduced rate that applies to a historic group of married women and widows. Clause 2 seeks to amend the calculation of annual maximum contributions and is effectively consequential on clause 1. Clause 3 sets out that the Bill will come into force on 6 April.

I would like the Minister to answer a couple of questions when he responds. Will he set out what conversations he has had with employers and payroll software developers about whether they will be ready to implement the provisions in this Bill from the start of the next financial year? I think I heard the Exchequer Secretary, the hon. Member for Grantham and Stamford (Gareth Davies), say on Second Reading that he was confident that a majority of employees would receive this tax cut at the beginning of the financial year, but is the Minister confident that every relevant employee will indeed receive the cut to national insurance in their first pay cheque of financial year 2024-25?

More widely, we support what this simple Bill seeks to achieve, so we will support all three clauses being approved by this Committee of the whole House.

--- Later in debate ---

[Kirsty Blackman]

Thank you very much, Mr Chair—hopefully that is an acceptable form of address to use. I want to speak about the Bill in general and some of our concerns about it. The reality is that this is the wrong measure at the wrong time, as I said on Second Reading.

Earlier, the hon. Member for Hampstead and Kilburn (Tulip Siddiq) spoke about her concerns about the SNP’s policies on oil and gas. She says that we are not putting workers first. Unfortunately, the Labour party’s plans for green investment in energy mean that 100,000 jobs will be lost in Scotland, which is very clearly not putting workers first—unless it is only workers in England who count—given that the money will go on nuclear power.

On the details of this Bill, the reality is that public services are creaking and really struggling. I have spoken to the Electoral Commission, which is concerned about whether it will even be able to deliver elections properly, given that mandatory voter ID has been introduced. The commission was able to co-opt people from other areas in order to ensure that all the recent by-elections were run properly. Will the Minister make it absolutely clear that if there is a general election this year—which there almost has to be; there certainly has to be one in the coming financial year—local authorities will have enough money and people to be able to deliver and service those elections? Will they have enough resources to be able to do that?

The 2022 autumn statement allocated more money to the NHS for 2024-25 than this Budget allocates, so it is a bit of a cheek for any Conservative Member to stand up and say that the Government are putting more money into the NHS. They are putting less money into the NHS than they proposed in autumn 2022. The consequentials that arise from the increase this year are actually less than the in-year consequentials that the Scottish Government had for the NHS in this current year, so it is a very minor increase, because it only works out to in-year terms—[Interruption.] Does the Chief Secretary to the Treasury, the right hon. Member for Sevenoaks (Laura Trott) want to intervene? It is ridiculous for the Government to say, “This extra money is going into the NHS” when it is demonstrably less than they intended to spend on the NHS back in autumn 2022.

The Bill is going to make changes to the national insurance rates, and those changes will disproportionately impact higher earners. The Minister was slightly disingenuous when he said that the changes represent a higher percentage for people on lower incomes. Yes, but that is significantly less money. A band 2 worker in the NHS will be getting a £341 reduction in their national insurance rate. An MP in this House will get four times that. How is it fair that somebody in this House who is, in the main, not struggling to make ends meet will get £1,300 when someone working in the NHS will get only £300?

NHS workers have seen exactly the same increase in their energy bills as we have. They have seen exactly the same increase in council tax—actually, no, they have seen a much higher increase in their council tax bills if they live in England compared with those who live in Scotland. They have seen the same 25% hike in food prices. Given that those on lower incomes spend more money on food proportionately than those on higher incomes, that 25% inflation in food prices disproportionately hits families who are earning less. Therefore, we need to give even more to those families, rather than saying, “Well, it’s a higher percentage of your income so you’re okay. You’ll be fine with £340, but those people who are earning 85 grand a year standing in the House of Commons deserve £1,300.”

The hon. Member for Norwich South (Clive Lewis) made a very good speech on this change, and as he said, it is the essence of trickle-down economics in action. The Government are hoping that if rich people get richer and inequality increases, those people at the bottom of the pile will somehow magically get richer as well. There are much better ways to do this. One of the worst things about this whole situation—apart from the fact that Labour Members are unwilling to oppose it—is the decimation of public services that will result from it. The fact is that we have had 14 years of austerity and that is set to continue. People are going to lose out on vital services. The NHS is absolutely vital. Every one of us has had some sort of interaction with the NHS, yet the Government are setting themselves up for decades of pay battles with staff members because they will be unable to give the pay uplift that people deserve. They are setting us up for the decimation of those services.

I mentioned in my Budget speech last week that £1 billion-worth of cuts have been made by local councils to arts funding. That means children cannot access arts education, cannot go to a local theatre with reduced-price tickets from their local council, and cannot access all these extra things. People are struggling to access the most basic services because local authorities are creaking at the seams, yet the UK Government’s priorities are to allow a 4.99% increase in council tax and to ensure that higher earners get £1,300 whereas those on the minimum wage of £11.44 an hour who work 20 hours a week see absolutely no benefit.

[Nigel Huddleston]

I probably will not respond to everything we have heard today, as we thoroughly addressed many of the issues in the Budget debate.

In response to the new comments, I assure the hon. Member for Aberdeen North (Kirsty Blackman) that we always ensure that the democratic process is adequately funded. She is dismissive of the £2.45 billion increase in NHS spending that was outlined in the Budget, but it is a significant amount and, as she is aware, it is a real-terms increase. I agree with the hon. Lady on the importance of arts, culture and the other areas she mentioned, which is precisely why the Budget had measures to extend tax reliefs.

My opposite number, the hon. Member for Ealing North (James Murray), asked about the logistics of implementing and executing the tax change. We understand the impact of policy changes, and I put on record how grateful we are for all those who have implemented and executed the recent changes so speedily and effectively. Employees whose employer is unable to make changes in time, and who have left their employment, may request a refund from HMRC. The Government are confident that the majority of software developers will be able to make changes to their payroll software in time for 6 April.

On the new clauses, we have outlined the policy today. The impact of any changes to policy would, of course, be subject to the usual public scrutiny of costs, including from the OBR. It is therefore not necessary to produce a report at this stage. The OBR’s “Economic and fiscal outlook” publication for the spring 2024 Budget includes an analysis of the impacts of threshold freezes, including on the number of people brought into paying tax. It is therefore not necessary to produce an additional report at this stage, so we do not believe new clause 1 is necessary.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

New Clause 1

Review of the effects of reducing employee and self-employed NIC contributions to zero

“(1) The Treasury must publish before the end of the parliamentary session in which this Act is passed an analysis of the effect of —

(a) replacing “8%” with “0%” in section 1(1) of this Act,

(b) replacing “1.85%” with “0%” in section 1(2) of this Act, and

(c) replacing “6%” with “0%” in section 1(3) of this Act.

(2) The analysis in subsection (1) must set out the expected impact of the changes in subsection (1)(a) to (c) on total receipts to the National Insurance Fund in each of the financial years from 2024/25 to 2028/29.

(3) The Treasury must request the Government Actuary to make an assessment of the consequences for the Consolidated Fund in each of the financial years from 2024/25 to 2028/29 of shortfalls in the National Insurance Fund that would result from a zero rate for employee and self-employed national insurance contributions.”—(James Murray.)

This new clause would require the Government, before the end of the current parliamentary session, to set out what the impact would be on total receipts from national insurance and overall public finances of reducing national insurance contributions for employees and self-employed people to zero.

Brought up, and read the First time.

[James Murray]

I beg to move, That the clause be read a Second time.

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[The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)]

Thank you very much. Can someone from the Liberal Democrats inform the Chair who their tellers will be, as their amendment has been selected for a separate Division?

[Nigel Huddleston]

As I mentioned earlier, the impact of policy and any changes to policy will be subject to the usual public scrutiny, including from the OBR on costs. It is therefore not necessary to produce additional reports. I will not play into the hands of the Opposition today by commenting further on their scaremongering. I refer the shadow Minister to the answer that I gave earlier, which I thought was quite clear. I am sorry that he is incapable of understanding the difference between an ambition and a policy, but the rest of the House seems to understand it. Hopefully, he will catch up at some point.

Question put, That the clause be read a Second time.

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[Nigel Huddleston]

I beg to move, That the Bill be now read the Third time.

I am grateful to all right hon. and hon. Members who have participated throughout the Bill’s passage today, and to you, Madam Deputy Speaker, and the other Deputy Speakers for skilfully guiding us through the process. I also thank all the Clerks, all stakeholders and all the officials for their work on bringing the Bill to the Floor and delivering tax cuts to the people of the United Kingdom. I commend the Bill to the House.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call the shadow Minister.

Post Office Redress

Nigel Huddleston Excerpts

Wednesday 13th March 2024 Written Statements

[The Financial Secretary to the Treasury (Nigel Huddleston)]

As the House knows, the Post Office Horizon IT scandal that began in the late 1990s has had severe impacts on the lives of the postmasters affected.

Following the Prime Minister’s announcement on 10 January, the Government have today introduced the Post Office (Horizon System) Offences Bill. The Bill defines a clear set of criteria for those convicted as a result of the Horizon scandal, and individuals in scope will have their conviction quashed. This is to be followed by swift financial redress delivered by the Department for Business and Trade.

The Government also announced in January this year that they would offer optional fixed-sum payments of £75,000 to postmasters in the group litigation order. Today, the Government have announced that they will extend this policy to the Horizon shortfall scheme to ensure equal treatment across the schemes. Those who have already settled their claim below £75,000 will be offered a top-up to bring their total redress to this amount.

It is the Government’s priority to take swift action to ensure affected postmasters receive full and fair financial redress with little administrative burden. That is why the Government will ensure that no income tax, capital gains tax, national insurance contributions, corporation tax or inheritance tax is payable on compensation to be paid to postmasters whose convictions are overturned by the upcoming legislation or by those who benefit from a £75,000 fixed sum payment on the Horizon shortfall scheme.

The Government will legislate via secondary legislation to exempt these payments in due course.

[HCWS336]

Commonwealth Parliamentary Association and International Committee of the Red Cross (Status) Bill (Money)

Nigel Huddleston Excerpts

Money resolution
Wednesday 28th February 2024 Commons Chamber

[The Financial Secretary to the Treasury (Nigel Huddleston)]

I thank the hon. Member for Cardiff South and Penarth (Stephen Doughty) and my right hon. and learned Friend the Member for Northampton North (Sir Michael Ellis) for their contributions. I have heard my right hon. and learned Friend, as I am sure has the ICRC.

The purpose of the Bill is to enable the Government to treat the CPA and the ICRC in a manner comparable to that of an international organisation. My right hon. and learned Friend made some broader comments and, as I say, the Government have heard them and I am sure that the ICRC has heard them.

I thank the hon. Member for Cardiff South and Penarth for his comments, particularly the way in which he, too, recognised and applauded the work of the Commonwealth Parliamentary Association. Its purpose and role are recognised across the House and around the world. There will be further debate on the Bill in Committee, so I will end my comments there.

Question put and agreed to.

Treasury

Nigel Huddleston Excerpts

Thursday 22nd February 2024 Ministerial Corrections

[Rebecca Long Bailey (Salford and Eccles) (Lab)]

T2. Many of my constituents whose lives have been destroyed by the loan charge scandal feel the central injustice is that the Government are focused on pursuing the victims rather than the companies responsible. They were dismayed to read recent allegations that individuals linked to such companies have donated hundreds of thousands of pounds to the Conservative party. Will the Chancellor confirm why exactly the Government are ignoring the providers and operators of the schemes? How many have been prosecuted specifically for their involvement in disguised remuneration, and not for other misdemeanours?

[The Financial Secretary to the Treasury (Nigel Huddleston)]

Eighty-five per cent of the funds recovered from the loan charge so far—about £3.9 billion in total —have come from the employees, therefore those who were running those schemes, so the hon. Lady is mischaracterising where we have gone so far. There has been one criminal conviction so far; others are in place. I repeat what I said to the Opposition spokesman, the hon. Member for Ealing North (James Murray), earlier: if they were that concerned about ensuring we go after the wrongdoers, they would have voted with us last night in the Finance Bill.

[Official Report, 6 February 2024, Vol. 745, c. 117.]

Letter of correction from the Financial Secretary to the Treasury, the hon. Member for Mid Worcestershire (Nigel Huddleston) :

Errors have been identified in the response I gave to the hon. Member for Salford and Eccles (Rebecca Long Bailey).

The correct response should have been:

[The Financial Secretary to the Treasury (Nigel Huddleston)]

About 80% of the funds recovered so far from settlement of disguised remuneration schemes including the loan charge—about £3.9 billion in total—have come from the employees, therefore those who were running those schemes, so the hon. Lady is mischaracterising where we have gone so far. There has been one criminal conviction so far; others are in place. I repeat what I said to the Opposition spokesman, the hon. Member for Ealing North (James Murray), earlier: if they were that concerned about ensuring we go after the wrongdoers, they would have voted with us last night in the Finance Bill.

Coastal Tourism and Hospitality: Fiscal Support

Nigel Huddleston Excerpts

Thursday 22nd February 2024 Westminster Hall

[The Financial Secretary to the Treasury (Nigel Huddleston)]

Let me join others in thanking the Backbench Business Committee for granting this debate, and congratulating my hon. Friend the Member for North Devon (Selaine Saxby) on securing it. As she referred to in her speech, she is indeed a persistent and persuasive advocate not only for her own constituents and constituency, but for the vital tourism, hospitality and leisure sector. I thank everybody for their contributions today; we have heard many good arguments, showing right across all four nations the passion, enthusiasm, empathy, love and support for this vital sector that employs so many of our constituents directly, and even more indirectly.

The Government are committed to promoting economic growth in all parts of the UK, and in order to do so we recognise the unique challenges faced by coastal communities, as raised by many Members today. We have supported coastal communities to level up through the dedicated funding under the coastal communities fund, while the levelling-up fund has provided more than £1 billion to projects in coastal areas. That was raised by my right hon. Friend the Member for Witham (Priti Patel), my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart) and others. More than £400 million has been provided from the UK shared prosperity fund, which will go to lead local authorities within or serving coastal areas.

The long-term plan for towns also targets more than £1 billion of support for towns up and down the country, including coastal towns, each of which will get about £20 million over the next decade. This is built on the support offered through successful bids into town deals and the future high streets fund. It is important to mention that of the 101 towns receiving a town deal, 22 are coastal and are set to receive more than half a billion pounds alongside almost £150 million from the future high streets fund. Therefore, directly or indirectly, the tourism, hospitality and leisure sectors will rightly benefit from some of this additional investment. Every Member has outlined today how the sector makes such a significant contribution to the UK economy as a whole, and to coastal areas in particular.

Let us not forget that the sector particularly suffered from the pandemic and is still recovering. Since the start of the pandemic, we have provided more than £37 billion for the tourism, hospitality and leisure sectors in the form of grants, loans and tax breaks. I think the hon. Member for North Devon mentioned some of those loans that are still being repaid. She was right to point out that they are still a burden on many businesses, but she will be aware that we have introduced considerable flexibility in those loans, extending the time to pay some of them from six to 10 years, and other measures. We are aware of the challenges. There is still a lot of debt to be paid off by individual companies, but also by the nation as a whole, because about £350 billion of support in total was provided to support individuals and the economy during the pandemic. That needs to be paid off, and everybody is sensible and aware that that will not be easy. It is why tax levels are as they are at the moment.

Of course, over the 2021 spending review period, the Government also allocated over £100 million to support the British Tourist Authority, which of course supports VisitBritain and VisitEngland, whose important work was mentioned by my hon. Friend the Member for Waveney (Peter Aldous); he also raised the point about where they spend their money, which is something that my colleagues at the Department of Culture, Media and Sport maintain a focus on. I applaud the work done by those bodies and by VisitScotland, Visit Wales, and the equivalents for Ireland and Northern Ireland. They do incredibly valuable work and attract not only domestic visitors but visitors in their millions from around the world, who come and enjoy everything that we have to offer.

Many Members have mentioned business rates. I have been lobbied by the ever-busy Kate Nicholls from UKHospitality; it sounds like she has been around quite a lot recently—and rightly so, because she represents such an important sector and so many people across the country. We have heard what those people have had to say and many Members have today re-emphasised the points that the industry bodies are making; UKHospitality is one of many industry bodies that are incredibly powerful and persuasive.

In the autumn statement, we announced tax cuts for the sector worth about £4.3 billion over five years. As has been mentioned by several Members, we also extended the retail and hospitality leisure relief scheme on business rates to 75%, creating a tax cut worth almost £2.4 billion for about 230,000 retail hospitality and leisure properties, which of course helps our high streets and protects small shops, many of which are in our coastal communities.

Of course, that relief was not extended by our colleagues in Scotland, nor fully extended in Wales. I assure hon. Members that we keep an eye on what is happening in other parts of the country and we share ideas. The sector is not particularly party political, as I know from my tourism role; tourism Ministers and others meet regularly across the nations, and work together and share ideas. In these difficult financial times there is not always the money to go around to do all the things that we would like to do, but we prioritised retail, hospitality and leisure for that specific additional relief in England.

The UK Government also decided to freeze the small business multiplier for the fourth consecutive year in 2024-25. That will protect over 1 million ratepayers and, combined with small business rates relief, will protect 90% of properties from inflationary bill increases. It will have a significant impact. For example, the typical pub will receive £11,800 of RHL relief off their final business rates bill in 2024-25; and, combined with the frozen small business multiplier, will benefit from about £12,800 of support.

Many Members also mentioned the registration threshold, which we have also received quite a lot of lobbying on. Of course, the Government recognise that accounting for that threshold can be burdensome on small businesses. That is why the UK has the second highest VAT threshold, at £85,000, within the OECD—keeping the majority of UK businesses out of VAT all together. I recognise that views on the VAT registration threshold are divided and the case for change has been reviewed regularly over the years. There was a review just a few years ago. No clear option for reform emerged from that review, but, as with all tax policy, we will continue to keep this policy under review. I am afraid that that might be a point I make several times in my concluding comments.

Quite importantly, several Members also raised the issue of cutting national insurance. As part of our long-term plan for growth and to ensure that work pays, we have cut taxes for 29 million working people. From last month, 27 million employees have had their national insurance contributions, or NICs, cut from 12% to 10%. That means that the average worker on £35,400 will receive an annual tax cut of more than £450 a year. Of course, the self-employed will have a tax cut and that benefit will come in from April. That comes on top of the existing £5,000 employment allowance, which means that about 40% of all businesses—around 675,000 in total—have been taken out of paying employer NICs entirely. My hon. Friend the Member for North Devon and I have spoken about that on many occasions. I heard the many calls for further reform of and further movement on national insurance contributions, but in advance of a fiscal statement, I am afraid that the Chancellor would not be impressed if I announced policy today. Nevertheless, all these issues are being looked at.

Hon. Members mentioned a few other issues. The hon. Member for Strangford (Jim Shannon) always makes important contributions, but from my multiple roles over many years, I know that the tourism, hospitality and leisure sector is a particular passion of his. I will finally take him up on his invitation to visit his constituency; my goal is to sort that out, so let’s talk dates very soon. As usual, he brought up something that other people do not. He reminded us that, although we can control certain things and pull certain levers, the all-important thing for the tourism, hospitality and leisure sector is the weather, which plays a vital role—sometimes boom or bust.

My hon. Friend the Member for Waveney pointed out the incredible diversity of offerings in the United Kingdom, so it is important to remember that at all times of year, in all weathers, there is something compelling to visit. We need to get that message across domestically and internationally through marketing.

The hon. Member for Strangford mentioned our heritage and the role played by the National Trust and many others in the ecosystem. I am more than happy to have conversations with other colleagues about his points about Barnett consequentials and the block grant, and I know he is having those conversations too. I will make sure they hear what he said today and his contributions in other areas.

My hon. Friend the Member for Hastings and Rye mentioned the importance of seasonality, which is related to the weather, and what we can do to reduce it. That is a particularly acute issue for the UK tourism industry, and it of course impacts productivity over the course of the year. She also mentioned planning policy and the important changes recently announced by DLUHC in response to its consultation with DCMS. The sector has been calling for a registration scheme for some time, and we hope it will have the desired impact.

The right hon. Member for Orkney and Shetland (Mr Carmichael) also talked about planning policy in different parts of the UK and about different regimes. He is an extremely knowledgeable advocate for the sector, and rightly pointed out that the multiplier impact is key. There is obviously a direct impact, but sometimes the indirect impacts are difficult to assess. He mentioned the VAT cut during the pandemic. We estimate that that cost the Treasury about £8 billion, but of course that was needed; it was a very difficult time. It was always intended to be temporary, although we are hearing many calls for a further reduction in VAT. That figure alone shows that it would not come without considerable cost, which needs to be factored in, but we recognise that there is a multiplier impact.

If we were to repeat that reduction, the cost would probably be £10 billion or £12 billion. Some are lobbying for a smaller rate cut to about 12.5%, which would have a smaller cost, but we are still talking about a loss of billions of pounds of revenue to the Treasury. As with all requests for a VAT cut, we need to know what the purpose is, what the impact will be and whether we can be confident that the lower prices will be passed on to the end consumer. That is usually the purpose of VAT cuts, in contrast with help with cash flow through other mechanisms such as business rates relief. The right hon. Gentleman was absolutely right to point out that, in this sector, pulling one lever can have a positive impact across a very wide area indeed.

My hon. Friend the Member for Waveney was right to showcase his constituency and others, because we have so much to offer. He unsurprisingly had a very broad range of asks and requests, which I will pass on to the relevant Departments. I assure him that we do talk across Departments, so I have had conversations with colleagues about many of the points he raised and other issues, because no one Department has oversight or control over the sector. As we have found in this broad-ranging debate, many Ministers and many Departments have some control over certain levers, but we talk to each other.

My hon. Friend also mentioned Hoseasons in his constituency. I should declare that I have visited on many occasions, because it was a client of mine many years ago. As some may know, I worked in the sector before coming into Parliament. I always enjoyed my visits to Lowestoft and the area—it was always sunny.

I am coming to an end, Mrs Cummins; I know that the debate could go on for three hours, but I will ensure that we do not. I am in agreement with many of the points made by my SNP and Labour opposite numbers—the hon. Members for Coatbridge, Chryston and Bellshill (Steven Bonnar) and for Ealing North (James Murray) respectively—because of the nature of the sector. In some other areas, I am in slight, respectful disagreement with them, but that should not detract from the fact that this sector has all-party support.

We may have differences of view on what levers to pull, but the sector has support across the whole House, so I conclude by saying that I very much appreciate all the contributions made today by right hon. and hon. Members—many substantial contributions, some compelling arguments and some very good ideas. In advance of a fiscal event, I cannot make any announcements or commitments, but I want to make it clear that we are always listening.

Independent School Fees: VAT

Nigel Huddleston Excerpts

Wednesday 21st February 2024 Westminster Hall

[The Financial Secretary to the Treasury (Nigel Huddleston)]

It is a pleasure to serve under your chairmanship, Mr Henderson. Please allow me to start by congratulating my hon. Friend the Member for Northampton South (Andrew Lewer) on securing the debate. What a pity we have only 60 minutes, because there was so much more to say here. We heard some fascinating and thoughtful contributions on the matter of independent school fees and VAT.

It will not surprise anyone present to hear that I agree wholeheartedly with Government Members, and I am very pleased to hear from our Lib Dem and DUP colleagues, who support the Government’s policy to allow independent school fees to be exempt from VAT for the many valid and obvious reasons expressed by hon. Members and right hon. Members today. Those include the incredible impact that they have on communities, the partnering, their impact on so many people’s lives, and the fundamental principle of choice.

I am afraid that what we have heard from the Opposition is what we hear consistently. Perhaps we might all be sighing with relief soon when we get the inevitable flip-flopping on this policy—I do not believe for one minute that it is wholeheartedly supported by Opposition Members. It is just virtue signalling of the highest order. It is complete left-wing populist virtue signalling by the Opposition, but the British public see straight through it. This Government understand the vital role that education plays in all our lives. Just this year, school funding will total about £57.7 billion, and next year it will be £59.6 billion. I am very proud to say that that will be the highest ever real-terms spending per pupil under the Conservatives.

[Sir John Hayes (South Holland and The Deepings) (Con)]

I am grateful to the Minister for giving way; I learned as a shadow Minister and a Minister that it is better to be gracious. The Minister will understand that one of the best arguments for independent schools is that they often innovate. My right hon. and learned Friend the Member for Fareham (Suella Braverman) was involved in establishing a school that innovates and breaks new ground. From Steiner schools to Bedales to Summerhill, those schools could only exist in the independent sector. How does the Minister think that the Labour party perceives that, or does it not perceive it at all?

[Nigel Huddleston]

My right hon. Friend, as always, talks very sensibly about this. The independent sector is a major contributor to our ecosystem. Of course, many teachers flip flop between the different sectors; the innovation in the private sector can also help the state sector, which is one of the many benefits that we have heard about today. In terms of the broader performance in the education system, not only do the Opposition consistently talk down the economy, our constituencies and our businesses but they also talk down our teaching profession. Actually, it is incredibly successful and we should be proud of what teachers have achieved.

Our commitment to quality education has seen 89% of all schools achieve “good” or “outstanding” at their most recent inspection, an increase from 68% back in 2010 under Labour. In the programme for international student assessment, our rankings for reading and maths improved by 10 places from 2015 to 2022 to ninth and 10th across the Organisation for Economic Co-operation and Development countries. Within that mix, as we all know, England performed better than Labour-run Wales or SNP-run Scotland, despite their higher funding. If we want to see what would happen in education under Labour, all we need to do is look to Wales—it is not an impressive performance. In the latest paediatric adverse childhood experiences and related life-events screener assessment of reading for 10-year-old students across 57 education systems, England ranked fourth internationally. I think we can all accept that those are good things.

This Conservative Government believe that there is a broad public benefit in the provision of education. That is why many education and training services are exempt from VAT, which includes an exemption on independent school fees. Labour does not seem to recognise the public good, as my right hon. Friend the Member for South Holland and The Deepings just mentioned. It wants to charge VAT on school fees and end business rates relief for private schools, taxing aspiration and inevitably putting more pressure on state schools.

[Brendan Clarke-Smith (Bassetlaw) (Con)]

I am very blessed to have two excellent independent schools in my constituency, Worksop College and Ranby House, and I speak as a former head of an independent school myself. We also have some excellent state schools at the Outwood Grange Academies Trust that give outstanding opportunities to local pupils. Does the Minister agree that the knock-on effect of this is not spoken about enough? Labour is actually adding to the capacity problems and neglecting the state sector in what it is doing to the independent sector.

[Nigel Huddleston]

My hon. Friend makes a really important point that has been repeated by many colleagues today. An introduction of 20% VAT can have two impacts: it will either push up prices or lead to cutting costs somehow. It is intuitively obvious that, if we push large numbers of pupils from the private sector into the state sector, it will inevitably put pressure on the state sector and therefore cost members of the public even more. The numbers suggested by the Opposition simply do not stack up. It is an ill thought out policy. The full knock-on impact has not been properly considered. VAT is an incredibly complex area. It is not simple to make blanket policy without considering the full impact.

Not every private school is some kind of Eton—a point made by my hon. Friend the Member for Worcester (Mr Walker) and several other hon. Members. There are exceptionally vulnerable people in very deprived areas of the country who rely on our private schools to provide the type of education they cannot get in the mainstream system.

[Sally-Ann Hart]

It is well known that many of our major independent schools such as Eton and Harrow give 100% bursaries to children from disadvantaged areas to give them a chance to skill up and to benefit for their own communities. That is amazing.

[Nigel Huddleston]

My hon. Friend is absolutely correct; the broader societal benefit of many of our private schools is considerable. That is one of the reasons why many, although not all, have charitable status. They provide all sorts of benefits, including through opening up for sports provision.

The Government are not alone in having concerns about Labour’s current policy. Labour’s own shadow Chief Secretary to the Treasury, the hon. Member for Bristol North West (Darren Jones), spoke out against its planned tax rise before he joined the Front Bench, telling students that he did not believe the policy would bring in the money that his party was promising. Of course, that has not stopped Labour from spending the money several times over already, and it does not have a plan to pay for the potential incremental costs.

I will bring my comments to a close, but I must express a slight disappointment: much as it is always a pleasure to have the hon. Member for Dulwich and West Norwood in this Chamber, I am normally faced in these debates by my opposite number, the hon. Member for Ealing North (James Murray). I must share an irony in that situation: I stand here today as a proud product of a comprehensive state school education nevertheless supporting the role of private schools in the UK and the principles of freedom of choice, aspiration, opportunity and social mobility.

My Labour counterpart is a product of the private school system yet is advocating a policy that could potentially restrict access to the very system from which he has himself benefited, as indeed have many Members on the Opposition Benches. I find that quite ironic and hypocritical, but I will never criticise somebody for the choices made by their parents. We do not do that on this side of the Chamber, but a little bit of humility in this debate might be appreciated. A good education for all is a priority for this Government, and I hope hon. Members from across the House will work with us to deliver it.

[Gordon Henderson (in the Chair)]

Andrew Lewer, you have two minutes to wind up.

Home Responsibilities Protection: Corrective Exercise

Nigel Huddleston Excerpts

Thursday 8th February 2024 Written Statements

[The Financial Secretary to the Treasury (Nigel Huddleston)]

The pensions Minister, my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), and I can now announce that HM Revenue and Customs (HMRC) has started to write to people whose national insurance records may be affected by some missing periods of home responsibilities protection, inviting them to apply to fill potential gaps and ensure that they receive the state pension entitlement they are due.

Home responsibilities protection was a scheme that ran between 6 April 1978 and 5 April 2010 which reduced the number of qualifying years of national insurance contributions a person with caring responsibilities needed to receive the full basic state pension.

The Government reported the findings of our investigations into some missing historical periods of home responsibilities protection in some individuals’ records, and the associated impact on state pension awards, in the Department for Work and Pensions annual report and accounts 2022-23 (HC 1455). The main cause of the issue was that NI numbers were not always recorded when customers claimed child benefit before 2000. The Government have estimated that around 210,000 individuals may have been affected by missing periods of home responsibilities protection.

HMRC and DWP are working together to correct cases as quickly as possible. HMRC started contacting potentially impacted customers from September 2023, prioritising those above state pension age. They aim to identify and contact the majority of individuals who may have been affected over the next 18 months so that those eligible receive any arrears payments as quickly as possible.

To correct this issue, potentially impacted customers will be invited to check their eligibility and make an application to HMRC for home responsibilities protection. To help individuals determine their eligibility, a self-identification tool is available on www.gov.uk. Where an application is successful, those with a state pension impact will have their award corrected and any arrears paid. HMRC and DWP will also trigger a wider communications campaign working with key stakeholders and representative bodies to ensure that all those who may be eligible are aware of this.

Before making an application, people can learn more about home responsibilities protection, check the eligibility criteria and find the application form online at www.gov.uk/home-responsibilities-protection-hrp/eligibility. Customers under state pension age can check their national insurance and state pension forecasts online at www.gov.uk/check-state-pension.

[HCWS255]